by Joshua Horn

Created on: July 19, 2007   Last Updated: February 24, 2009

Globalization, quite simply, is the ever-increasing interconnectedness of the world's global economy. It describes the transformation of local or regional events into global ones. With the advent of technological advancements that bring more people together and increase the flow of information worldwide comes a world economy which bridges gaps between cultures and geography to bring goods, services and people together.

While the concept of globalization as an economic or social phenomena is fairly new, we can see early examples in various historic circumstances. For example, the extensive road construction of the Roman Empire created a sort of global economy. While it didn't encompass the entire world, it did connect Europe to China and allowed information and goods to move more easily.

The Internet and technology that takes advantage of it, including wireless computing and smart-phones, allow companies to do business from practically anywhere in the world. Goods can be made in one country, shipped to another, and purchased by consumers in yet another. Workers in one country can even do jobs for companies in another. For example, India businesses often serve European or US companies by providing customer service representatives.

Advocates of greater free trade see globalization as positive and inevitable. They encourage globalization as a means to increase the number of resources and funds traveling through local economies, moving more money through businesses and into the hands of workers, who in turn send this money back into the world economy through the goods they purchase. Material wealth, pro-globalization proponents argue, will increase worldwide as businesses find larger markets in which to sell their goods.

Proponents of globalization believe that by reducing national boundaries, profits can increase and prices for goods will drop. Tariffs and international taxes drastically increase the prices for various good and services that are imported into the United States. By reducing these tariffs, it seems logical that prices for goods will decrease in the consumer market. In turn, more goods can be purchased, increasing the producer's profits.

Those who are against globalization cite a decreasing job market for citizens in the United States. With businesses finding cheaper workers for both unskilled and skilled jobs in labor markets overseas, namely India and China, the number of positions available throughout the United States is quickly decreasing. Anti-globalization proponents continue to voice concern over the destruction of the national economy with the growth of a global one.

While globalization isn't new, the challenges it brings continues to shake the economic landscape across every continent on the globe. Businesses must learn to accept cultural differences and understand customs before being truly competitive on a global scale. For instance, mistranslations in advertising products can leave customers unsure of the actual goods that are available. To be truly global in today's economy requires assets spanning all the markets in which a good is to be sold.

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